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Bank customer satisfaction declines during the Finance Royal Commission

Source: Roy Morgan Single Source (Australia): average monthly sample n = 4,444
Base: Australian 14+ with at least a deposit/transaction account with bank: average monthly sample, n = 3,869. 1. Very or fairly satisfied. 2. Very or fairly dissatisfied
New research from Roy Morgan shows that bank customer satisfaction has dropped from 82.3% in January 2018, prior to the Finance Royal Commission, down to 78.5% in May 2018. This is now the lowest monthly satisfaction since May 2012 but still remains ahead of the long term average of 74.0% calculated since 2001 and well up on the 60.0% recorded in January 2001. This data shows the importance of understanding long term trends rather than being distracted by what in hindsight can often be seen as relatively short term events.

These are the latest findings from the Roy Morgan Single Source survey of over 50,000 consumers per annum, resulting in over 4,000 interviews per month with bank customers which enables regular and reliable monitoring of satisfaction results.

Dissatisfaction with banks low but increasing

A lot has been published over the last two decades regarding satisfaction with banks, which has improved considerably from 60.0% in 2001 to 78.5% currently but the level of dissatisfaction also needs to be monitored closely.

The following chart shows that the level of dissatisfaction with banks, although relatively low, has increased to 6.2% in May from 4.6% in January, just prior to the Finance Royal Commission and is now at the highest level since April 2012.

Bank Customer Satisfaction


Source: Roy Morgan Single Source (Australia): average monthly sample n = 4,444
Base: Australian 14+ with at least a deposit/transaction account with bank: average monthly sample, n = 3,869. 1. Very or fairly satisfied. 2. Very or fairly dissatisfied


The segment that is neither satisfied or dissatisfied has increased to 15.3% in May 2018, up from 13.1% in January and appears to be as a result of a shift by some customers who were previously satisfied. The fact that more than one in five bank customers (21.5%) are now either dissatisfied with their bank or only rather neutral (neither satisfied or dissatisfied) poses a potential threat to customer retention, particularly considering that this has increased from 17.7% in January 2018.

Bank customer advocacy shows some weakening

This survey shows that currently only just over half of bank customers (52.2%) consider that they would be highly likely to recommend their bank to others (‘high advocates’), down from 53.5% in January and 55.4% in February, prior to the Royal Commission.

The following chart shows that although only 12.2% of bank customers currently consider that they would be very unlikely to recommend their bank (‘low advocates’), this is showing an upward trend from January 2018 when it was 9.4% and now represents the highest level since October 2016.

Likelihood of Recommending Bank

Source: Roy Morgan Single Source (Australia): average monthly sample n = 4,191
Base: Australian bank customers 14+: average monthly sample, n = 3,881. 1. Based on a rating of 8, 9, and 10 on a ten point scale where 10 is very likely to recommend and 1 is very unlikely to recommend. 2. Based on rating of 5, 6, 7 3. Based on rating of 1, 2, 3, 4.


The ‘medium advocates’ are those that are really indifferent to recommending their bank but currently represent just over a third of customers (35.4%), a decline from 37.0% in January 2018. The combination of ‘low advocates’ and ‘medium advocates’ still represent 47.6% of bank customers, providing some concern and major scope for improvement.

Norman Morris, Industry Communications Director, Roy Morgan says:


“It is not surprising given the current level of negative publicity involving banks and the Royal Commission, that satisfaction with banks and customer advocacy levels are showing declines from the start of 2018. Despite the declines, the current levels of satisfaction and advocacy remain above historic levels but the potential impact of continued negative publicity represents a major challenge for banks.

"Apart from the potential for adverse publicity to impact on bank customers, our modelling shows that many other factors that directly affect them drive bank advocacy and satisfaction levels. These include areas such as interest rates, fees and charges, customer experience, reliability, security and product offering. Each of these broad areas have been broken down further into a number of very specific dimensions that then enables a better understanding of what drives advocacy and satisfaction at each of the ten largest banks.”

For comments or more information please contact:
Norman Morris, Industry Communications Director
Office: +61 (03) 9224 5172
Norman.Morris@roymorgan.com


About Roy Morgan

Roy Morgan is the largest independent Australian research company, with offices throughout Australia, as well as in Indonesia, the United States and the United Kingdom. A full service research organisation specialising in omnibus and syndicated data, Roy Morgan has over 70 years’ experience in collecting objective, independent information on consumers.

Margin of Error

The margin of error to be allowed for in any estimate depends mainly on the number of interviews on which it is based. Margin of error gives indications of the likely range within which estimates would be 95% likely to fall, expressed as the number of percentage points above or below the actual estimate. Allowance for design effects (such as stratification and weighting) should be made as appropriate.

Sample Size

Percentage Estimate

40%-60%

25% or 75%

10% or 90%

5% or 95%

1,000

±3.0

±2.7

±1.9

±1.3

5,000

±1.4

±1.2

±0.8

±0.6

7,500

±1.1

±1.0

±0.7

±0.5

10,000

±1.0

±0.9

±0.6

±0.4

20,000

±0.7

±0.6

±0.4

±0.3

50,000

±0.4

±0.4

±0.3

±0.2